In a significant step toward making a campus for federal agencies and the military a reality in Algiers, the Navy and planners have agreed on basic terms for a 75-year lease of the Naval Support Activity's West Bank site, setting the stage for congressional approval.

The action culminated months of negotiations and an approaching federally mandated Sept. 30 deadline to set financing and break ground on the "federal city" or else the Algiers base would close.

Senior Navy officials signed the lease Wednesday about 3:30 p.m., one day after state Rep. Jeff Arnold, D-Algiers, chairman of the Algiers Development District board, signed off on the terms on behalf of the city of New Orleans and the state.

"We've got some hard work left, but at least we can see the finish line from here," said retired Marine Corps Maj. Gen. David Mize, who has spearheaded the project.

Deputy Assistant Secretary of the Navy Howard Snow notified people involved in the project that "the final signatures are on the federal city term sheet and the package is on the way to" Congress.

Mize said the Navy can lease property only if Congress reviews the terms and agrees. By law, Congress has 45 days to act, meaning project officials have been rushing to complete negotiations and send them to Capitol Hill this week before the Sept. 30 deadline.

U.S. Sen. David Vitter, R-La., said Tuesday he and other members of the Louisiana delegation are prepared to work with the oversight committees to ensure approval.

Financing for the project already has been set. Last month, the State Bond Commission approved the sale of $150 million in bonds, which officials say satisfies Louisiana's financial commitment.

The next step, Mize said, is to "turn the terms into a full-blown lease and signing that lease" before Sept. 30.

The developments are expected to be announced this morning at a news conference.

Negotiations "nearly completely unraveled in recent months" because the Navy said it did not want to sign lease terms with a nonprofit corporation, the New Orleans Federal Alliance, that was created four years ago specifically to oversee the federal city, Vitter said.

Officials involved in the negotiations selected the Algiers Development District board, which Vitter said is "a more clearly defined entity under state law that (made) the Navy more comfortable."

The district board in a special meeting Aug. 6 agreed to be the signatory for the state and city. The board, in turn, will sign a "management contract" with the alliance, which Mize oversees, and will continue to oversee its development.

Assistant Attorney General Mike Vallen, who recently represented the district board in talks with Navy officials in Philadelphia, told the board last week the Navy wanted it "to be actively involved in the negotiations of the lease."

In an emergency meeting Tuesday night, the district board also agreed to hire Fred Chevalier of the Jones Walker law firm to represent it in writing the final lease as early as next week. The attorney general's office recommended Chevalier, Vallen told the board.

In May 2005, the Defense Department announced that it wanted to close the Naval Support Activity. But months later, a federal commission agreed to retain the base's Algiers campus and close the east bank facilities, allowing the city and state to move forward with federal city. The panel authorized Marine Forces Reserve to be a federal city tenant.

Vitter said the estimated cost to build facilities for Marine Forces Reserve is about $115 million.

Vitter and Arnold also said a simple ground-breaking ceremony will suffice to meet the commission's second requirement of commencing construction.

Paul Purpura can be reached at ppurpura@timespicayune.com or 504.826.3791.